1. Field of Invention
This invention relates to legal document computer systems, specifically as used to analyze and edit such documents or sets of such documents.
2. The Prior Art
The prior art consists of various approaches for the initial creation of a draft of a legal agreement by assembling contract provisions contained in a computer database. The agreement is assembled by adding provisions sequentially, one on top of the other, like stacking building blocks. Once assembled, the initial draft can then be sent by a law firm to opposing counsel to begin negotiations. Some examples of such prior art are disclosed in U.S. Pat. No. 5,692,206 issued to Shirley et al. (1997), U.S. Pat. No. 6,934,905 issued to Tighe (2005) and U.S. Pat. No. 7,080,076 to Williamson et al. (2006).
A computer database of contract provisions is actually an excellent idea. However, its application in the context of the prior art is essentially useless. This is because law firms have no need for the prior art's technology. The reality of law firm practice is that law firms already have standard model documents which are already drafted and ready for use. Thus, they have no need to assemble documents using a legal text database. The documents are already assembled.
An Example of Actual Law Firm Practice:
A Stock Purchase Agreement.
As a more specific example of why the prior art is not useful, consider a start-up company that wants to raise capital. It can do this by privately selling stock to investors pursuant to a stock purchase agreement.
In such a situation, the company would approach its law firm and ask them to prepare a stock purchase agreement. The law firm would likely also prepare a disclosure document, describing the company to the potential investors and setting forth the potential risks of the investment.
The law firm would accomplish these tasks by virtue of the fact that it would already have model documents on its computer system. It would already have a template stock purchase agreement available for use on its word processing system. It would already have a template disclosure document. So to prepare new drafts for the company, it would simply take these template forms, fill in the company's name and address, and the documents would be ready to be sent to the opposition (i.e. the investors and their law firm).
Of course there are situations more complicated than simply filling in a name and address. There may be risks specific to the company's proposed business that need to be included in the disclosure document. Or the proposed investment may have non-standard terms regarding profit sharing or atypical restrictions on the investors' assigning their newly purchased interests in the company.
In those instances, standard practice is for a law firm to choose the most similar versions of the same kinds of documents that it has worked on for a different, previous client. Using these most similar versions, the law firm would change the previous client's name and address, and then further revise the documents as necessary. Sometimes it might even use other sample documents from multiple previous clients to assist in the process. Perhaps one client's prior deal had one similar aspect of the current deal but a different prior deal had another aspect. However, even in that circumstance, simple cut and paste functionality available in any commercial word processing program quickly and easily allows for combining text as necessary.
In other words, the use of a separate contract provision database program to assemble an initial set of documents is not particularly helpful, since the documents are nearly fully assembled at the outset. The use of a separate program for such a database would, in the foregoing context, simply be cumbersome and a distraction.
Same Process for all Documents.
Such use of standard forms, or recycling old documents used for previous clients with some minor changes, is the reality of law firm practice today. It is as true for drafting a stock purchase agreement as it is for drafting an agreement for a loan or for a sale of real estate. This is because it simply doesn't make sense to “reinvent” the wheel by assembling each document over and over again from scratch. The time and energy involved in such an approach rule it out on efficiency grounds. Furthermore, such an approach of new document assembly introduces additional risks to the process—key aspects of documents might be accidentally left out in the assembly process.